Cryptocharity —

Bitcoin makes bid for respect with new foundation

Bitcoin Foundation will support lead Bitcoin developer, organize conferences.

One of the traditional strengths of Bitcoin, the peer-to-peer cryptocurrency, has been its decentralization. Because no one is in charge of the network, users place their trust in the security of the Bitcoin protocol rather than in any specific institution.

Yet decentralization also has costs. So far, the management of the flagship Bitcoin client has largely been a volunteer effort. There's no one to field media inquiries or represent the Bitcoin community with policymakers. A group of Bitcoin luminaries hopes to change that by forming the Bitcoin Foundation.

The new organization is modeled on the Linux Foundation, a non-profit that employs Linux creator Linus Torvalds and represents the Linux platform to the broader world. A letter from Peter Vessenes, executive director of the freshly minted Bitcoin Foundation, notes that lead Bitcoin developer Gavin Andresen, "maintains the software and manages the core team without any compensation—or day job—beyond the joy of Bitcoin programming." Raising enough money to pay him a salary will be one of the foundation's first tasks.

The foundation is seeking support from both individuals and corporations. Donations are to be made in Bitcoins. The foundation's board represents several Bitcoin businesses, including the leading Bitcoin exchange Mt.Gox. Mt.Gox has pledged to be the foundation's first "platinum" corporate sponsor, paying dues of 10,000 BTC ($120,000) per year. Two other Bitcoin businesses, BitInstant and CoinLab, have pledged to become corporate members and have seats on the board.

In addition to supporting the development of the Bitcoin software, Vassenes says the foundation will organize a Bitcoin conference in Silicon Valley in 2013 and will "publish a set of best practices for businesses transacting in Bitcoin, covering topics from accounting to physical and digital security."

The Bitcoin Foundation won't have any direct control over the Bitcoin network, which will continue to operate independent of any institution. But the foundation hopes to accelerate the network's growth by supporting both better software and broader public awareness.

Timothy B. Lee
Timothy covers tech policy for Ars, with a particular focus on patent and copyright law, privacy, free speech, and open government. His writing has appeared in Slate, Reason, Wired, and the New York Times. Emailtimothy.lee@arstechnica.com//Twitter@binarybits